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Surveillance States of America; Hackers Targeting Credit Cards; Beyond the Budget Deal; The Business of Being Will Ferrell

Aired December 21, 2013 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, CNN ANCHOR: It's not just Santa who knows whether you've been naughty or nice. It's also the NSA, Google, Facebook and credit card hackers.

I'm Christine Romans. This is YOUR MONEY.

When it comes to tests, your government is either too smart or back in the dark ages. The rollout of healthcare.gov may have been a fiasco but America's fine capabilities are feared and envied by the rest of the world.

This week a federal judge ruled the NSA's bulk collection of phone records is likely unconstitutional.

Is the program essentially essential to security or an abuse of power? That's in the eye of the beholder. Let's look at this from the perspective of the NSA director. General Keith Alexander says the NSA's intelligence programs have helped prevent 54 terror attacks, 13 of those in the U.S. alone, including a threat to New York City subways.

Now put on your Google glasses. Google along with other major tech companies says the government has overstepped. A report in the "Washington Post" alleged the NSA is tapping into links connected to the company's data centers giving the government access to users information. The NSA denying those claims.

Now tech companies are worried this could damage their businesses. Of course their research says Cloud computing companies could lose a quarter of their businesses up to $180 billion by 2016 as companies and individuals put their data elsewhere.

Tech company leaders have filed lawsuits against the NSA and written open letter calling for reform. This week, they took their case to the White House.

John Avlon is a CNN political analyst and executive director of "The Daily Beast." Shobhan MacDermott is chief policy officer at AVG Technologies and the author of Wide Open Privacy Strategies for the Digital Life.

She says people should be afraid of Google spying on them and not the government, which brings me to the meeting this week from the tech executives and the White House. You look at that sort of photo-op and I said, they know too much about you. And who I'm talking about? I'm talking about the tech companies and the government.

Why should we even be so afraid of Google?

SHOBHAN MACDERMOTT, CHIEF POLICY OFFICER, AVG TECHNOLOGIES: Well, I think part of the reason we should be afraid of it is that they see everything, they see everything that you search for. They see everything that you're looking at and people share a whole bunch of information online. And they're not necessarily aware of the fact that that information isn't just disappearing after they look for something.

ROMANS: This is the way that Edward Snowden puts it. Let's listen to this.

(BEGIN VIDEO CLIP)

EDWARD SNOWDEN, NSA LEAKER: You're being watched and recorded. And the storage capability of the systems increases every year consistently by orders of magnitude to where it is getting to the point you don't have to have done anything wrong. You simply have to eventually fall under suspicion from somebody.

(END VIDEO CLIP)

ROMANS: Some privacy experts have sort of noted how rich it is really that you've got some of the big tech companies telling the White House they don't like their methods when it -- tech companies know an awful lot about you.

MACDERMOTT: Yes, I mean, that's true. And if you look at social media networks, they probably know more about you because you're sharing information there that you're not necessarily conscious of all the time. You're putting pictures of your kids up. They know where they're going to school. They know where you live. They know when you're home, you're checking in on social media sites and saying, I'm either at home or I'm not at home. You know all of these things open you up to all kinds of privacy issues.

ROMANS: Is this, John -- the revelations about the NSA and the problems with healthcare.gov, they creek this sort of this credibility gap for the president. A recent ORC poll finds 53 percent of the Americans say the president is not honest or trustworthy. Double what it was at the end of 2008.

Can he regain the public's trust?

JOHN AVLON, CNN POLITICAL ANALYST: He can. But you see that downward trend. And it really is because of that core claim of his re-election campaign, if you like your health care, you can keep it. And you take the screw-ups of healthcare.gov and then the revelation that that wasn't true. And that hurts it. But this president has always gotten high marks on that measure.

The larger dynamic actually is a trap that the president is caught in. And it's a trap that Eisenhower began warning about 60 years ago with the military industrial complex. We have seen the creation of a surveillance state, a national security state that has become unaccountable even to the commander in chief. And that's one of the fascinating dynamics of our time and could be one of the major challenges of his second term.

Can he dial that back? Can he rein the surveillance state? Or is the Genie out of the bottle because of both private and companies and their interaction with the government.

ROMANS: So let's go back to the big companies, the big tech companies, Shobhan. Facebook, Google, they need users. The public is essentially the product, not the consumer. Really, right? I mean, it's our information that they're dealing with.

What kind of damage does it risk to these companies' reputation as a result of these I would say growing privacy concerns?

MACDERMOTT: Well, I think in my opinion one of the things that's always difficult to look at is the actual sheer amount of data that's been collected on people. And the fact that all of this can be taken out of context. There's no context put around it. When you look at national surveillance, there's context around it in the fact that you're looking for, you know, a specific threat.

ROMANS: That's a really good point.

MACDERMOTT: As opposed to when somebody is collecting a bunch of data about an individual. I may be searching, for instance, you know, presenting at a conference on child exploitation, now those are in my Google searches. Well, somebody takes that out of context and looks at me and says, what kind of person are you? And do I need to, you know, take a look at me in further detail.

Again the issue of context, I think, is really important when it comes to the difference between the government watching what you're doing and the tech companies watching what you're doing.

ROMANS: Yes. Everyone is watching. There's so much information, it's insane.

AVLON: There is. And you've got two motives. You've got the profit motive, you've got the national security motive. But I mean, the overall issue is technology outpacing our laws.

ROMANS: Yes.

AVLON: The growth of technology has so outpaced against our laws.

ROMANS: Absolutely.

AVLON: That until that accountability comes in, that gray area will be exploited by people pursuing their own self-interest.

ROMANS: And that's what the -- that's what the tech companies basically said to the president. They want -- they want the rules of their own.

AVLON: Exactly.

ROMANS: Because we just have an archaic system.

Shobhan MacDermott, John Avlon, nice to see both of you, guys. Thank you.

AVLON: Merry Christmas.

MACDERMOTT: Thank you.

ROMANS: Coming up, even if you're not a Target shopper, even if you're not worried about the 40 million customers who fear their information was stolen, you should be. Next, we'll show you how easy it is for hackers to get their hands on your credit card number.

(BEGIN VIDEO CLIP)

MIKE PARK, TRUSTWAVE: If I have access to the entire mag-stripe data that's on this device and I can -- I can get all of this and enough information to actually create a whole different card.

(END VIDEO CLIP)

ROMANS: It's not the news Target was hoping we'd be reporting this holiday season. If you shopped at Target between November 27th and December 15th, your information may have been stolen.

Right in the middle of Black Friday and the holiday shopping craziness, hackers hit those card readers that you use at checkout. So how could this have happened and what information can hackers steal from that little magnetic strip on your credit cards?

CNNMoney tech correspondent Laurie Segall is here with some answers.

Hi, Laurie.

LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: Hey. Well, as you said, this hack is so widespread. We wanted to take an inside look and see exactly the information these hackers could get if you were one of those unlucky folks that swiped your card at Target. Check it out.

(BEGIN VIDEOTAPE)

SEGALL (voice-over): If you've done some holiday shopping at Target -- you might be wondering what a hacker could learn about you from your credit card.

When you swipe, here's what a hacker could learn from the data in that magnetic strip. Your name, your credit card number, the card's expiration date and the CVV code on the back.

JOSE PAGLIERY, CNNMONEY: All of these key data that can be used to falsify that card and go ahead and fraudulently use it online, they can access that just by taking what's on the strip.

SEGALL: In the case of the Target hack, that data may have been enough for hackers to make a counterfeit card. One security researcher who showed us the different credit card hack explains. To the employee, everything looks normal.

MIKE PARK, TRUSTWAVE: I just have to log in. I could make a selection here. And then I can do a credit card swipe. It will ask me for the CVV. I can put in a CVV. Whatever numbers I want. And then click pay. Right? Nothing seems untoward.

SEGALL: For the customer, pretty standard.

PARK: You're paid. You get your receipt. You move on.

SEGALL: But for the hacker.

PARK: I have access to the entire mag-stripe data that's on this device and I can -- I can get all of this and enough information to actually create a whole different card.

SEGALL: The Target hack has some saying that the U.S. is a little behind the times in terms of secure payments.

PAGLIERY: Well, one secure -- more secure solution that they have in Europe right now is this chip and PIN system in which the card doesn't actually have a strip. It has a chip within it. And every time you use it, you also have to use a pin.

SEGALL: According to the Federal Reserve, credit card fraud in England plummeted 34 percent in the six years after English banks and merchants implemented chip and PIN cards. During a similar period in France, fraud from in-person card fell 35 percent. But this holiday season, millions of American shoppers might have been the target.

(END VIDEOTAPE)

SEGALL: You know, the silver lining is we're having this discussion about what kind of technology can we invest in to ensure this kind of thing doesn't happen again. But I'll tell you the -- the security researcher we spoke to, now he says, the major retailers are still at risk. They have faulty software.

ROMANS: And not just when you're a consumer, you're just so bummed that you do everything that the retailer wants you to do. You're going out there and spend.

SEGALL: Right.

ROMANS: I mean, that's what their advertising machine is trying to get you to do. And then they can't keep a hold of your data.

SEGALL: Yes.

ROMANS: Frustrating.

Laurie Segall, nice to see you. Thank you.

For more stories that matter to YOUR MONEY, give me 60 seconds on the clock. It's "Money Time."

(BEGIN VIDEOTAPE)

ROMANS: Drug giant GlaxoSmithKline will no longer pay drug reps based on their sales numbers. It'll also stop paying doctors marking a big change in how the pharma company pushes its products.

Vitamins are a waste of money. Strong words from researchers studying long-term benefits in taking multivitamins. The vitamin industry rakes in nearly $12 billion every year.

Revenge of the nerds? Or not so much. A new study finds people who were attractive in high school end up making more money later. An 8 percent bump for good-looking women and 4 percent more for men.

Target is shunning Queen B. The retailer will not sell Beyonce's album. It was available digitally first. Target says that hurt sales.

Can you smell what the Rock is cooking? "Forbes" named Dwayne Johnson this year's top grossing actor. His movies including "Fast and Furious 6" and "G.I. Joe" brought in $1.3 billion at the global box office.

(END VIDEOTAPE)

ROMANS: Coming up, this economy is taking flight, but could Groundhog Day in Washington crush the recovery? I'm going to go one-on-one with the Republican senator who says if Democrats want to talk debt ceiling, they better be prepared to bargain over Obamacare.

(COMMERCIAL BREAK)

ROMANS: Fact. The economy is getting better in this country. Stock market records, a housing recovery for those with cash and credit. Soaring corporate earnings. The U.S. economy grew more than 4 percent in the third quarter. More than 4 percent. This recovery is benefitting the top 1 percent of households. In the past three years, they've taken home 95 percent of the income gains.

What does that say about where the country is headed?

Senator Ron Johnson, Republican of Wisconsin, joins me now.

Senator, welcome back to the show. So nice to see you. Let me start with this economy. It's taking flight. No one -- no one wants to see the government ground the plane, but here comes Groundhog Day. Republicans say they want concessions in exchange for raising the debt ceiling early next year.

The White House says it won't negotiate and the Treasury secretary Jack Lew can't, quote, "foresee any reasonable scenario" in which the government can keep paying all the bills past March.

Senator, how does this end? SEN. RON JOHNSON (R), WISCONSIN: Well, hello, Christine. First of all, let's talk about what we just did. We have, I believe, avoided government shutdowns at least through fiscal year 2015. And that's a good thing. You know, try and bring some certainty to our economy. Try and give some of these agencies and departments and committees in Congress the opportunity to rationally prioritize spending.

So we have to return some certainly to our economy so it can continue to grow and create jobs. But when it comes to the debt ceiling or let's put it another way, when the president comes to Congress, asking for the authority to increase the debt burden on our kids and grand kids. You know, I think the American people do expect some additional fiscal reforms to be at that point.

From my standpoint, what I'd like to do is I'd like to do is I'd like start taking a look at this health care law, taking -- hopefully our Democratic colleagues are listening to the pleas of Americans that are begging for relief that are -- you know, just -- they're unbelieving in terms of how harmful that --

(CROSSTALK)

ROMANS: Are you -- wait, are you going to tie the health --

JOHNSON: How harmful -- that's what I would like to do.

ROMANS: Are you going to tie reforms to the health care law to raising the debt ceiling?

JOHNSON: Well, that's what I'd like to do. I'm not sure exactly, you know, what type of fiscal reforms, what type of fiscal discipline, what kind of, you know, you have to do something. The American people expect us to do something.

If we're going to increase the debt burden on our kids and grandkids, we have to do some kind of reforms to make Social Security and Medicare solvent for future generations to stop the bankrupt in this nation.

ROMANS: So --

JOHNSON: We have to do something.

ROMANS: You talk about people crying, you talk about crying for relief from the health care law, but at the same time you have people crying for relief for a little more time on unemployment benefits.

We'll talk about what the bill -- the budget bill doesn't do. It doesn't extend the federal unemployment benefits. 1.3 million Americans are going to lose those benefits at the end of this month. And when you look at the economic data, as I do, Senator, you can see, for people newly unemployed, things are getting better. Things really are.

For people who've been out of work six months or longer, it's the same old story. And those jobless benefits go right into the economy. Would you support putting more money into jobless benefits here? If you're talking about crying for relief from health care reform, what about crying for relief for the long-term unemployed?

JOHNSON: Let's talk about the health care law's effect on unemployment. You know the 29ers. The people who are now being put into part-time status so that their employers don't have to pay that fine. You know, this health care law is doing a great deal of harm to job creation, but anybody that wants to increase or renew unemployment benefits, you've got to first say, well, what is the lower priority spending item that you're going to, you know, take off the table?

You know what areas of the budget are you going to cut to make room for what you consider higher priority item? So that's the -- that's the first table stakes. Don't come and request some more government spending without showing us how you're going to reduce the deficit in another area.

ROMANS: Clearly, a lot of prioritizing to go for the next couple of years.

JOHNSON: Absolutely.

ROMANS: You know, on this show, sir, we talk about one America but two economies. Anger over income inequality. Anger over a lack of a living wage. It's really on the rise.

I want you to listen to liberal comedian Bill Maher and then I want to give you a chance to respond.

(BEGIN VIDEO CLIP)

BILL MAHER, HOST, "REAL TIME WITH BILL MAHER": When even working people can't make enough to live, they take money from the government in the form of food stamps, school lunches, housing assistance, daycare. This is the welfare that conservatives hate, but they never stop to think, if we raise the minimum wage and force McDonald's and Wal-Mart to pay their employees enough to eat, we, the taxpayers, wouldn't have to pick up the slack.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

ROMANS: I've got to ask you, does Bill Maher have a point?

JOHNSON: No, when you raise the minimum wage, you remove those entry level positions, you create more unemployment. And that's not a good thing. What you need to do is you need to actually make the manufacturing base of this country more robust. How do you do that? You make America an attractive place for business investment, business expansion, job creation.

We have an onerous regulatory environment in this country. Obamacare is part of that. We have uncompetitive tax rates. I mean, if you're a German manufacturer who want to manufacture for the largest economy in the world, are you going to site your plant in Toronto at 15 percent, or Detroit at 35 percent?

So it's not rocket science in terms of what we have to do to make America an attractive place for job creation. We're just not doing it in this totally dysfunctional place called the federal government.

ROMANS: Well, at least we have the frameworks of a budget deal for the next couple of years. We'll take that as nice starting point.

Thank you, sir.

JOHNSON: That's a small little step. Have a merry Christmas.

ROMANS: You, too. Thank you so much.

All right. Coming up, who is your favorite CNN anchor? No, he doesn't work for CNN, but he's probably your favorite, maybe your second favorite anchor of all time. The business of being Will Ferrell, next.

Plus, winning the lottery without buying a ticket. An incredible moment. So how much money does it take to elicit this reaction?

(BEGIN VIDEO CLIP)

YOUNG SOO LEE, STORE OWNER: Oh, my gosh. Oh, my -- I never that much money.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROMANS: This might just be the most valuable mustache around. You might not be aware, but "Anchorman 2: The Legend Continues" is out this weekend. It hasn't been heavily marketed or advertised, so you're excused for not knowing.

Seriously, the man behind the mustache is everywhere. He's everywhere. Take a look at the business of being a comedy god.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Ron Burgundy is back.

WILL FERRELL, "RON BURGUNDY": We haven't seen you in a while, America.

ROMANS: From your TV cabinet to your liquor cabinet, the business of being Will Ferrell is --

DAVID KOECHNER, "CHAMP KID": It's just refreshing.

ROMANS: During seven seasons on "Saturday Night Live," he earned laughs. Known for his impressions, from George W. Bush --

FERRELL: Strategery.

(LAUGHTER)

ROMANS: To Janet Reno, to Saddam Hussein.

FERRELL: Monica, you never call me anymore.

ROMANS: In his last season, he reportedly became the highest paid cast member. His salary: $350,000.

FERRELL: We're going streaking.

ROMANS: Before long, he went old school.

FERRELL: Yes.

ROMANS: The movie was a hit, box office take $87 million worldwide.

FERRELL: It's so good.

ROMANS: This funny man became a leading man. There was "Elf."

FERRELL: Santa. Oh, my gosh.

ROMANS: "Anchorman: The Legend of Ron Burgundy."

FERRELL: You stay classy, San Diego.

ROMANS: "Talladega Nights: The Ballad of Ricky Bobby." "Blades of Glory. "Stepbrothers." The animated hit "Mega Mind."

FERRELL: Incredibly handsome, mater of all villainy.

ROMANS: And the "Campaign."

FERRELL: Let me hear a (INAUDIBLE).

ROMANS: They haven't all been hits, and he was once named the most overpaid actor by "Forbes." But tallied all up, movies Will Ferrell has starred in have grossed almost $2 billion.

FERRELL: Massive amounts of money.

ROMANS: And that's before "Anchorman 2."

FERRELL: Why can't the news be fun?

ROMANS: Ron Burgundy does product placement very well. Dodge commercials featuring the anchorman helped push Durango sales up almost 60 percent in October.

FERRELL: It makes you feel pretty dumb, doesn't it?

ROMANS: The fictional character has inspired a line of underwear, scotch, and an ice cream flavor.

FERRELL: I love scotch. Scotchy, scotch, scotch. ROMANS: And Ferrell can also sell beer. Apparently based on this ad for old Milwaukee that went viral. Ferrell has also taken his talents to Broadway with a one-man show called "You're Welcome, America: A final Night with George W. Bush." He also he co-founded the comedy video Web site, "Funny or Die."

FERRELL: Don't make fun of me crying.

ROMANS: Don't worry. The business of being Will Ferrell leaves very little to cry about.

(END VIDEOTAPE)

ROMANS: Wow. And that "Funny or Die" Web site is no joke. It gets millions of unique visitors every month. It's got backers in Silicon Valley, lots of advertisers and partnerships with big media companies. Not bad for -- not bad an outlet for all of Will Ferrell's very funny videos. The only coming I know who's got D.C. backing.

All right. It's not a movie but it's a Hollywood ending. Young Soo Lee owns the Atlantic convenient Store that sold one of two winning Mega Millions tickets for Tuesday's monster jackpot. She figured she'd be paid $25,000 for selling that ticket, but CNN's Martin Savidge delivered her quite a shock.

(BEGIN VIDEO CLIP)

YOUNG: Long time ago, I heard it's $25,000.

MARTIN SAVIDGE, CNN CORRESPONDENT: 25,000. Let me just tell you, it's a lot more than $25,000.

YOUNG: Really?

SAVIDGE: It is about $1 million that you get.

YOUNG: I do? Oh, my gosh. Oh, my -- I never have that much money.

(END VIDEO CLIP)

ROMANS: Good for her. What a stroke of luck.

Thanks for starting Saturday smart with us. I'm going to be right back here for a brand new YOUR MONEY at 2:00 p.m. Eastern. Don't miss it.

But next on "CNN NEWSROOM," 225 miles above the earth. A critical plumbing problem on the International Space Station. A broken valve knocking out one of the station's cooling systems. Astronauts taking the first of three daring space walks to fix it.

"CNN NEWSROOM" starts right now.

VICTOR BLACKWELL, CNN ANCHOR: Oh, the weather outside is frightful, and the travel -- eh, not so delightful. Nearly 95 million people are getting out of town for the holidays, expect severe icing, powerful thunderstorms, and flight delays with your holiday cheer.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Since I'm in charge, obviously, we screwed it up.

(END VIDEO CLIP)

PAMELA BROWN, CNN ANCHOR: President Obama talking about his health care rollout and what he calls his biggest mistake of 2013. According to CNN's new poll numbers on the president's performance, that wasn't his only problem this year.

BLACKWELL: And right now, an emergency mission is under way at the International Space Station to fix a broken cooling system. We'll take you to the space walk live, and one astronaut will tell you why these missions are so risky.

You're in the CNN NEWSROOM.